How To Understand And Understand Forensic Accounting

Transcription

1 Forensic Accounting and Investigations University of Texas at Arlington 14 August 2013

2 Overview What is Forensic Accounting? Definition and Services The Forensic Accountant History Roles Within Organizations Fraud How Fraud Occurs Anti-Fraud Programs Responding to Fraud Page 2

3 What is Forensic Accounting? Definition and Services Definition Characteristics of Forensic Accounting Services Examples of Services Fraud Investigations Compliance and Risk Assessments Disputes / Litigation Support Damage or Loss Assessments Page 3

4 What is Forensic Accounting? The Forensic Accountant Degrees Backgrounds Certifications Certified Public Accountant (CPA) Certified Fraud Examiner (CFE) Certified in Financial Forensics (CFF) Other Specialties Qualifications Careers Page 4

5 What is Forensic Accounting? The Forensic Accountant (continued) Forensic Accountants vs. Auditors Objective Skill Sets Responsibilities In-House or External? Independence and Objectivity Attorney Client Privilege Specialties Page 5

6 What is Forensic Accounting? History of Forensic Accounting 1800 s 1900 s Accountant testimony in bankruptcy hearing Legal accounting Al Capone Lindbergh Kidnapping Forensic accounting Professional History American College of Forensic Examiners American Board of Forensic Accounting Journal of Forensic Accounting, Auditing, Fraud, and Taxation Page 6

7 What is Forensic Accounting? History of Forensic Accounting (continued) Sarbanes-Oxley Act Enron, Tyco, and Worldcom Provisions Public Company Accounting Oversight Board (PCAOB) Relevant Provisions Internal Controls Audit Committee Whistleblowers Protections Impact of Sarbanes-Oxley on Forensic Accounting Independence Considerations Forensic Accounting Today Page 7

8 What is Forensic Accounting? Roles Within Organizations Board of Directors Audit Committee External Auditors Internal Auditors External Forensic Accountants Page 8

9 Fraud How Fraud Happens Cressey s Fraud Triangle Focus on Opportunity Preventing Fraud Internal Controls Anti Fraud Program Perceived Opportunity Page 9

10 Fraud Components of an effective anti-fraud program Elements of a successful corporate anti-fraud program Code of Ethics Setting the Proper Tone Fraud Prevention Policies Communication and Training Fraud Risk Assessment Proactive Controls Monitoring and Analytics Reactive Incident Response Plan Management Ownership and Involvement Anti-fraud key activities Corporate compliance assessment Corporate compliance design Gap analysis Future state design session Discovery response planning Records and information management Who owns fraud? Assign roles and responsibilities Fraud and risk committee formulation Customized training Corporate governance Design sessions Corporate anti-fraud road map Anti-corruption compliance assessments Fraud risk assessment Targeted anti-fraud analytics Operational analytics M&A Due Diligence 3 rd Party Due Diligence Vendor Risk profiling Vendor Vetting -Level I, II, III background checks Investigations Fraud response planning Forensic data analytics Discovery and document review Page 10

11 Fraud Responding to Fraud Investigation Process Fraud Trigger Review and Analysis Determine Response Fraud Response Team Determine Scope Conduct Investigation Ongoing Communication Report Findings and Conclusions Follow-up Page 11

12 Questions Page 12